Mail Bag Question – 57 Years Old and Unemployed. Now What?

by Neal Frankle, CFP ®

57 years oldIf you were 57 years old and lost your job, what would you do? At that age, it’s not so easy to start over.  Her’s an email I received some time ago from a gentleman facing this exact problem:

My biggest financial challenge:

I am employed and will be losing a job in 4 months; I am an 57 years old and I believe I will experience age discrimination while looking for a new job.

My wife does not work outside the home; we have a daughter that is in college.

I did not save for college and retirement; my current employer has a qualified saving plan (401(k)) and I have to make sure I provide for college and try to save for retirement and health care premiums. What should I do?

What would you tell Jerry?  My approach would be to address each issue independently. Let’s deal with the employment issue first.

Jerry’s job is winding down and he expects difficulties finding new work.

At 57, he may indeed encounter age discrimination when he goes looking for new work. If that does happen, I don’t think it would be the best use of his time or money to fight it. It’s probably not a battle he can win. Having said that, there are still a ton of things he can do:

a. Start looking for new work now.

Your current employer may not sufficiently value your experience, but you will find another employer who does. Use social media effectively. Talk to friends. Scan Craig’s List. You should also talk to HR at your current job – they may be able to help. Regardless of your/ or age and education level, you can still find a good job.  Don’t give up

Jerry may find it tough to find work.  But he only needs to find one. Each interview he goes on now gets him closer to that “yes.” And he should not assume that the new job will be worse than his current position. You never know what’s out there. Maintain a positive attitude.  (Here’s a post that might help.  It talks about finding a job despite terrible conditions.)

b. Hire yourself out as a consultant and start now.

List your services at Elance.com and Guru.com. Use these sites to find work during the weekend that can become your full-time business later on. These are great sites that allow independent contractors to bid on all kinds of work. If your current contract forbids this kind of action, talk to your employer and see if they will make an exception. It doesn’t hurt to ask. They might feel terrible about phasing your job out, and if so you can use my favorite secret weapon on them – guilt.

I started my career in a bank a few decades ago. After a few years, I decided to set out on my own. About a year before I opened my own shop, I started using a marketing program because I wanted to make sure that I could find new clients after I left the bank.

While I was employed at the bank, I introduced new clients to the bank’s financial services of course. But once I knew the marketing program worked, I left the bank.

Use the time you have now to build up a consulting business in your field of expertise. When the day comes that your job is phased out, you might find that you are making more money than ever.

c. Consider starting a new business but be careful.

I strongly recommend that people refrain from opening businesses in which they have no experience. And even if you do have the experience and skills you need to be an excellent employee, that doesn’t mean you have the skills to be an excellent business owner and manager.

I love small business and small business owners. I have nothing but respect for these people. But it is safer to start a business slowly and build it up. Don’t sink too much money into something before you see a positive cash flow.

If you insist on going into business and you don’t want to go the consulting route, consider buying a franchise. Make sure you do your homework and only get involved with a franchise that is growing and has demand. Talk to as many existing franchise owners as you can. Talk to franchise owners who have closed their stores. Find out why they closed.

d. If possible, Jerry’s wife should consider working too.

Health permitting, this could be great for both Jerry and his wife. Especially since they don’t seem to have small children at home anymore. She might find it very rewarding on a personal level and her salary will help take some pressure off of Jerry.

These are four ideas Jerry can use to increase his income. Can you think of anything else Jerry should consider?

Do you think these are good ideas or are these suggestions unrealistic?

photo by JC Westbrook, Flikr


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